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Are All Trade Protection Policies Created Equal? Empirical Evidence for Nonequivalent Market Power Effects of Tariffs and Quotas

  • Bruce Blonigen
  • Benjamin H. Liebman
  • Justin R. Pierce
  • Wesley W. Wilson

Over the past decades, the steel industry has been protected by a wide variety of trade policies, both tariff- and quota-based. We exploit this extensive heterogeneity in trade protection to examine the well-established theoretical literature predicting nonequivalent effects of tariffs and quotas on domestic firms' market power. Robust to a variety of empirical specifications with U.S. Census data on the population of U.S. steel plants from 1967-2002, we find evidence for significant market power effects for binding quota-based protection, but not for tariff-based protection. There is only weak evidence that antidumping protection increases market power.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 16391.

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Date of creation: Sep 2010
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Publication status: published as Blonigen, Bruce A. & Liebman, Benjamin H. & Pierce, Justin R. & Wilson, Wesley W., 2013. "Are all trade protection policies created equal? Empirical evidence for nonequivalent market power effects of tariffs and quotas," Journal of International Economics, Elsevier, vol. 89(2), pages 369-378.
Handle: RePEc:nbr:nberwo:16391
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